New York, Bakken and crude oil by rail: where is the love?

The crude-by-rail industry is not feeling so much of the “love” in New York’s “I Love New York” slogan these days.

Governor Cuomo has put a target on the backs of those moving Bakken oil in particular, which some recent tests have shown has the volatility of gasoline. That spells trouble for the crude, more of which is moving through the New York capital of Albany by rail and then barged down the Hudson River to East Coast refiners. It is access to more domestic crudes that has kept those plants open after pricey imports almost shuttered them a few years ago.

New York’s crude-by-rail scrutiny is taking the form of a so-called “inspection blitz” of rail yards and terminals, along with a moratorium that has created uncertainty around projects to bring in more heavy oil.

Granted, New York has reason to be concerned after several recent derailments in the state and the still-shocking memory of the deadly Lac Megantic explosion in Quebec.

Cuomo says he doesn’t want to take any chances. So far, the state has found tank car issues such as defective wheels and brake shoes, as well as track problems. The findings, which will also look at barging of crude, will be part of a report due to the governor’s office by April 30.

In a one-two punch, Albany County recently put a moratorium in place that could hold up Global Partners’ plans to move more discounted heavy oil through the hub. The company, which already moves light, sweet Bakken through its facilities, wants to install boilers to heat heavier crude. But Albany County wants to ban “construction or expansion of any facility involved in the heating, transport or storage” of crude until public health implications are “better understood.”

Global, which has not commented to Platts about the potential monkey wrench, has unleashed “a cadre of lawyers” to defend itself, according to a statement from Albany County Executive Daniel McCoy.

“We will not back down and we will not let Big Oil and its hordes of lawyers use hollow threats to stop us and the people from ensuring environmental justice in Albany County,” said McCoy.

“Interesting, and perhaps most telling, nowhere do Global’s lawyers deny that the shipment and processing of high volumes of crude oil present real and substantial public health and safety risk,” he said.

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PAUSE is a grassroots group of individuals who have come together to promote safe, sustainable energy and fight for environmental justice. We engage the greater public to stop the fossil fuel industry’s assault on the people of Albany and our environment.